Local Politics

Easley: Send campaign case to DA

Posted October 29, 2009 6:12 p.m. EDT
Updated October 29, 2009 11:12 p.m. EDT

— Former Gov. Mike Easley wants the State Board of Elections to forward his campaign finance case to the Wake County District Attorney's Office for a full investigation, his attorney said Thursday.

In his closing statement to the elections board at the end of the four-day hearing, attorney Tommy Hicks said Easley sees a criminal investigation of his activities as the only way to clear his name.

"Whatever happens, the public is going to ask, 'Did Mike Easley slip one over on the board?'" Hicks said.

The elections board is set to discuss the case behind closed doors Friday morning before announcing its decision, Chairman Larry Leake said. The board could take no action or issue a fine or reprimand in the case, and it also could turn its findings over to the district attorney for possible criminal prosecution.

WRAL News will provide live coverage of the board's decision, beginning at 9:45 a.m. Friday on WRAL.com, WRAL Mobile, over-the-air channels 5.1 and 50.3 and Time Warner Cable channels 252 and 255.

Despite Easley's request for an investigation, board member Charles Winfree said, the law doesn't allow the board to refer a case to prosecutors unless they're convinced a crime has occurred.

Leake said that determining whether a crime occurred depends on whose testimony board members believe.

On Monday, Raleigh businessman McQueen Campbell said that he ferried Easley around the state in his private planes for the 2000 and 2004 campaigns but was never reimbursed for them. He also said Easley suggested that he bill the campaign for repairs  to Easley's Raleigh home that Campbell paid for and list the expense as flight costs.

During almost five hours of testimony Wednesday – it marked the first time a sitting or former North Carolina governor faced an elections board inquiry under oath – Easley flatly denied Campbell's allegations and tried to explain other issues that witnesses had raised before the board.

"It never, ever happened," Easley said of the conversation Campbell contended the two had about falsifying campaign invoices.

Hicks reiterated that stance Thursday afternoon, calling Campbell "a sycophant to the former governor" who got caught in a lie over whether he had been reimbursed for the campaign flights he provided and kept digging himself in deeper.

"There's a lot of it that just doesn't make sense," Hicks told the board, quickly adding that it would have made even less sense for Easley to condone sending bogus bills to his campaign.

Campbell's attorney, Hill Allen, issued a statement late Thursday saying Campbell isn't interested in getting into a war of words over the case.

"Mr. Campbell did not ask to testify. He had no ax to grind, no agenda. When called upon to testify, he did so humbly, sincerely (and) honestly, and we are at peace with the public judging his testimony," Allen said.

The elections board spent most of Thursday hearing testimony from Scott Falmlen, a former executive director of the North Carolina Democratic Party. Two Wilmington businessmen said Monday that they gave large donations to the party in 2003 and 2004 with the understanding that the money would be funneled back to the Easley campaign.

State law limits contributions to candidates to $4,000 in an election, and both men had already reached the cap when they gave to the Democratic Party.

According to testimony during the hearing, memos circulated within the Easley campaign before the 2004 election suggested that campaign officials wanted to use the Democratic Party to pick up the tab for much of their expenses, and the campaign officials hatched a plan to redirect money from donors to the party so they wouldn't have to deal with contribution limits.

Political parties can accept unlimited amounts from donors and can give as much support to candidates as they want, but it's illegal for money given to a party to be earmarked for a specific candidate.

Falmlen said he was unaware of any such plan by the Easley campaign, but he noted the Democratic Party decided how to spend its donations.

"Certainly, there were occasions where we said, 'No, that's not an expenditure the Democratic Party can make,'" he said, although he couldn't cite any examples.

Some of the checks from Easley donors included a "reattribution form" that allowed the Democratic Party to deposit them even though they were made out to the Easley campaign. Falmlen said the party accepted those forms at face value and didn't question the intent of the donors, and the money was put into a party account monitored by the Federal Election Commission.

The party used an internal code on those and other donations to track how much money Easley raised for the party and how much financial and in-kind support the party provided to his campaign, he said. But he insisted the money wasn't held in a separate account that the campaign could tap at will.

Campbell billed the party for some flights as in-kind contributions, and the party then turned those over to the Easley campaign as part of its support during the 2004 campaign, Falmlen said. The move wasn't an effort to skirt contribution limits, he said.

"I believe we had a good relationship with the Easley campaign, and if they said (the flight) was made on behalf of the party, we took them at their word. If a donor said it was on behalf of the party, we took them at their word," he said.

Still, the party paid more than $24,000 to the elections board this summer to surrender the value of those flights and a few other in-kind gifts once questions were raised about their legality.

Jim Cooney, the attorney representing the Democratic Party, said in his closing statement that the payment should resolve any issues over the flights. He also said there was no evidence that the party participated in any scheme to circumvent campaign contribution limits.

John Wallace, an attorney for the Easley campaign, said the campaign likewise paid the elections board money this year to surrender the value of a GMC Yukon that Fayetteville car dealer Bobby Bleecker provided to Easley in 2003 free of charge. Bleecker said Monday that he treated the deal as a lease but agreed not to collect any money until Easley was finished using the vehicle.

The campaign paid Campbell for all of the flights officials knew about, Wallace said, noting it's difficult to look back over nine years and be sure that everything has been accounted for.

He laid the blame on any unreimbursed flights at Campbell's feet, saying he "utterly failed" at reporting such contributions in a timely manner and overstated the value of the flights by using hefty charter airplane rates.

Yet, the campaign wasn't diligent enough at ensuring at tracking in-kind contributions, Wallace said.

"The Mike Easley Committee failed to live up to all of its responsibilities," he acknowledged. "What we're all learning here is that more is required (of campaigns)."

Attorney David Long, who also represented the campaign, said corporations only recently started using compliance officers to ensure they met all legal obligations, and he said state law might need to be changed if the elections board feels campaigns need to do more as well.

Bob Hall, executive director of Democracy North Carolina, the political watchdog group whose complaint prompted the elections board hearing, said the testimony and evidence introduced at the hearing shows the need for campaign finance reform in the state.

"I think it is illegal for a candidate to circumvent the $4,000 limit," Hall said. "In practice, this is an end run."